Capital efficiency and execution London, 7 February 2014 Margareth Øvrum, EVP, Technology, projects and drilling
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Key messages Predictable and competitive project execution Manufacturing based execution to improve margins and reduce cost Capex reducing measures in place to deliver USD 1.7 bn aggregated between 2014 and 2016, of which USD 1.0 bn in 2016 3
Strong project performance and trends All time low SIF [Projects] Delivering on cost 1) [Projects and Drilling & well] and on schedule [Projects and Drilling & well] 2 110% 105% 1.3 107% 103% 101% 100% 1.0 100% 99% 100% 97% 0.5 0.5 0 0.3 2009 2010 2011 2012 2013 90% 2009 2010 2011 2012 2013 90% 2011 2012 2013 Number of serious incidents per million working hours (SIF) Expected forecast at completion compared to sanctioned estimate Deviation from planned completion date 4 1) Project cost only: 2009: 105%, 2010: 101%, 2011: 98%, 2012: 98% and 2013: 99%
Strong drilling performance and trends Strong safety improvements and no serious well incidents in 3.5 years despite increased well activity while reducing well cost in a challenging market 4 140 100 3.5 120 82 3.0 1.9 1.8 64 87 75 75 74 70 0.7 0 2009 2010 2011 2012 2013 0 2010 2011 2012 2013 40 2010 2011 2012 2013 Number of serious incidents per million working hours (SIF) Number of Statoil operated global offshore wells - multilaterals to optimise drainage not included MUSD per Statoil operated NCS offshore well 5
Improving on external benchmarks Strong 2013 benchmark results above Front end loading Facility Facility cost predictability Well cost competitiveness Industry average on Front end loading Reservoir and Front end loading Well Well cost predictability Facility cost competitiveness Production attainment below Late changes Strong development 2010: Four of the nine benchmarks on or above industry average 2013: Eight of the nine benchmarks on or above industry average 1) 6 1) Source: 2013 IPA
Johan Castberg Johan Sverdrup Robust execution of large projects On track Start construction in 2014 Cost efficiency and technology upsides GUDRUN MARINER JOHAN CASTBERG TANZANIA VALEMON AASTA HANSTEEN JOHAN SVERDRUP EAST COAST CANADA Near completion Early Phase 7
Offshore manufacturing the fast track projects Six on stream, six more to come Low break even ~ 40 USD/boe Mboe/day 150 100 40% shorter execution time Average IRR (nom) > 25% 50 0 2013 2020 Fast track projects 8
Increased value from US onshore well manufacturing Total well cost ~ 90% of upstream capex margin leverage Strong improvements and competitive results during Q1 2012 to Q4 2013 25% to 50% reduced drilling cost 30% to 50% reduced drilling time Further total well cost reduction potential ~15% by 2016 Upside from new technology development Days per well 35 32 31 29 27 28 23 22 23 10 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 55 54 42 43 40 34 10 35 10 Drilling time reductions per well from 2012 to 2013: BAKKEN EAGLE FORD 25 26 26 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 33 MARCELLUS 26 19 16 22 19 18 17 17 15 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Statoil operated Statoil non-operated Drilling cost reductions per well from Q1 2012 to Q4 2013: -25% -40% -50% 9
Extensive efficiency program Efficiency program Capex Capex Savings of USD 1.7 bn aggregated between 2014 and 2016, of which USD 1.0 bn in 2016 Annual net Statoil pre-tax capex USD 1.7 bn Opex Improved well cost Lower facility cost for new projects 1 Capex savings Production efficiency Reduced modification spend 2014 2015 2016 10
Significant potential identified first results delivered Field development & modifications Offshore wells Onshore wells Delivered Gudrun 12% reduced facility cost Troll well construction time savings of 15% 25-50% drilling cost savings between Q1 2012 and Q4 2013 Potentials Reduce modification capex by 20% Lower facility cost from leaner concepts Reduce rig commitments Reduce well construction time by 25% Reduce total well cost by further 15% 11
Identifying further standardisation savings potentials Realised effects Fast track 40% less time to production US onshore 25-50% lower drilling cost CAT rigs 20% higher operational efficiency FSUs USD 60 million in savings Current Selected potentials Standardised equipment and modules 1) USD 150-300 million in savings Standardised platform concepts 8-10% facility capex reduction Vertical X-mas trees 1) USD 0.8 1.0 bn over fields lifetime Standard production wells 10-20% lower average well cost Subsea on slim legs 20-30% savings versus subsea solution 12 Note: All capex figures represent 100% licence cost 1) Johan Sverdrup and Johan Castberg
Key messages Predictable and competitive project execution Manufacturing based execution to improve margins and reduce cost Capex reducing measures in place to deliver USD 1.7 bn aggregated between 2014 and 2016, of which USD 1.0 bn in 2016 13